On Wednesday, U.S. stock markets joined a global downturn as Treasury yields surged, with the 10-year note climbing above 4.60 percent. Adam Turnquist, chief technical strategist at LPL Financial, emphasized the significance of interest rates, noting that the 10-year and 2-year yields reached 'uncomfortable levels,' fueling investor anxiety.
Closing quotes for key U.S. indices on Wednesday were as follows:
S&P 500 (^GSPC): The Standard and Poor's 500 concluded at 5,266.95, down 39.09 points or 0.74 percent.
Dow Jones Industrial Average (^DJI): The Dow Jones Industrial Average finished at 38,441.54, dropping by 411.32 points or 1.06 percent.
NASDAQ Composite (^IXIC): The NASDAQ Composite index wrapped up at 16,920.58, showing a decrease of 99.30 points or 0.58 percent.
The fluctuating performance of these indices underscores the ongoing complexities and uncertainties in the global market landscape. Investors remain vigilant, closely monitoring economic indicators, corporate earnings reports, and geopolitical developments for insights into future market trends.
Trading volumes were significant, with billions of dollars' worth of shares traded throughout the day. This high level of activity highlights the active involvement of investors in the market as they navigate opportunities amidst fluctuations and evolving dynamics.
World foreign exchange markets
In the world foreign exchange markets on Wednesday, there was a surge in demand for the greenback as equities, oil, gold, and silver all experienced declines.
Here are the latest quotes for Wednesday across key currency pairs:
EURUSD (Euro / US dollar): The Euro to U.S. dollar exchange rate was at 1.0801, indicating a decrease of 0.51 percent.
USDJPY (US dollar / Japanese yen): The US dollar to Japanese yen exchange rate rose to 157.68, representing a 0.34 percent increase for the dollar.
USDCAD (US dollar / Canadian dollar): The Canadian dollar exchange rate slipped to 1.3714, showing a decline of 0.51 percent.
GBPUSD (British pound / US dollar): The British pound declined by 0.46 percent to 1.2702.
USDCHF (US dollar / Swiss franc): The Swiss franc decreased by 0.12 percent to 0.9134.
AUDUSD (Australian dollar / US dollar): The Australian dollar fell by 0.52 percent to 0.6614.
NZDUSD (New Zealand dollar / US dollar): The New Zealand dollar declined by 0.38 percent to 0.6117.
Economic downturn sparks Fed concerns
This week's market downturn has been driven by a variety of factors, including earnings reports and stronger-than-expected economic indicators. Bonds have suffered notably amid mounting concerns about inflation, exacerbated by a lackluster Treasury auction on Wednesday, leading to the 10-year Treasury yield reaching its highest level since late April.
Investor sentiment has been rattled by robust economic data, with fears that indications of a strengthening economy might prompt the Federal Reserve to maintain higher interest rates for an extended period as it combats inflation. Despite the S&P 500 notching gains in 23 of the last 30 weeks, matching a record set in 1989, it is now poised for a negative week.
Deutsche Bank analysts noted on Thursday that the recent string of gains was unsustainable, with momentum now shifting towards a more negative outlook.
Fresh economic data on Thursday revealed a downward revision of US gross domestic product in the first quarter to 1.3% from 1.6%, alongside signs of slowing personal consumption. While this suggests a cooling economic expansion, some analysts perceive it as a double-edged sword.
Chris Zaccarelli, chief investment officer at Independent Advisor Alliance, highlighted on Thursday that while slowing consumption and economic growth might concern companies and stock market investors, it could also facilitate a decline in inflation, potentially prompting the Fed to lower interest rates.
Attention is now focused on Friday's release of the Personal Consumption Expenditures index for April, the Fed's preferred measure of inflation.